This report sets out the rationale for the creation of a wholly owned Housing Company as part of a proactive approach to increase and influence the supply of new homes in order to help address this shortfall. 

1.      That the creation of a housing company, limited by shares and wholly owned by the Council be approved, with the overarching aim of increasing housing supply in Central Bedfordshire be approved through:

·      the development of sites owned by the Council; and

·      the creation and, where appropriate, retention by the Company, of housing stock with a range of tenures that address gaps in the market not met by either the private sector or through development within the HRA.

2.         That the proposed governance arrangements for the Company, as set out in paragraphs 44 to 47 in the report, be approved.

3.         That the Director of Community Services be authorised, in consultation with the Council’s Chief Executive, Director of Resources, Monitoring Officer and a reference group consisting of the Leader, Deputy Leader and Executive Member for Corporate Resources, Executive Member for Adults, Social Care and Housing Operations and Executive Member for Assets and Housing Delivery to set up an appropriate company structure, including;

(a)  commencement of the incorporation of the Company and selection of the name of the Company in order to do so.

(b)  approval of the type of company, the articles of the company and the composition of the Board.

(c)   appointment of the Directors and Company Secretary of the Company.

(d)  approval of a Shareholders’ Agreement to be entered into between the Company and the Council.

(e)  ensuring that the Company will hold appropriate insurances and/or benefit from the insurances that the Council holds.

4.         That the Deputy Leader and Executive Member for Corporate Resources be authorised to take decisions on the exercise of shareholder powers in the Company.

5.         That the Director of Resources be authorised, in consultation with the Deputy Leader and Executive Member for Corporate Resources, and in line with the Council’s Treasury Management Policy, to agree the terms of a £250,000 loan to be made by the Council to the Company to fund set up costs and provide initial working capital.

6.         That the Director of Resources be authorised to determine prices, in agreement with the Company, for any services provided by the Council for the Company.

The Executive considered a report from the Executive Member for Assets and Housing Delivery setting out the rationale for the creation of a wholly owned housing company.  This was part of a proactive approach to increase and influence the supply of new homes in order to help address the shortfall between demand for and supply of new affordable homes:

·         in absolute terms as viability issues have resulted in below policy delivery; and

·         in specific tenures, particularly in the provision of affordable rental housing, older people’s housing and specialist accessible housing.

In response to questions, the Executive Member for Assets and Housing Delivery explained that each potential development would be considered in line with the current mechanisms, set out in the Constitution and financial regulations.  This could either be through delegated powers or via a report to the Executive for disposals over £500k.  A list of potential sites was being explored and would be submitted to the Executive for consideration.

There were a number of key risks in setting up a wholly owned company but these had been considered and there was a strong financial model and business case.  The Council would provide equity in return for shares in the Company and then the Company would pay a dividend to the Council in return for this once it had become profitable.

Appropriate governance arrangements would be put in place to enable a clear decision-making framework.  It was recommended that a Company Board be set up to include an independent Chair, four Council representatives (two Councillors and two senior officers) and a Managing Director of the Company.

Reason for decision:  To set out the rationale for establishing a wholly owned housing company to develop and retain housing using the Council’s land assets where this was the most appropriate option for use of that land.

RESOLVED

1.      that the creation of a housing company, limited by shares and wholly owned by the Council be approved, with the overarching aim of increasing housing supply in Central Bedfordshire be approved through:

·      the development of sites owned by the Council; and

·      the creation and, where appropriate, retention by the Company, of housing stock with a range of tenures that address gaps in the market not met by either the private sector or through development within the HRA

2.         that the proposed governance arrangements for the Company, as set out in paragraphs 44 to 47 in the report, be approved;

3.         that the Director of Community Services be authorised, in consultation with the Council’s Chief Executive, Director of Resources, Monitoring Officer and a reference group consisting of the Leader, Deputy Leader and Executive Member for Corporate Resources, Executive Member for Adults, Social Care and Housing Operations and Executive Member for Assets and Housing Delivery to set up an appropriate company structure, including;

(a)  commencement of the incorporation of the Company and selection of the name of the Company in order to do so.

(b)  approval of the type of company, the articles of the company and the  ...  view the full minutes text for item 118